Sloan Center News
State Workforces Can Be Competitive Despite Threat of Brain Drain
16 December 2009—State agency personnel from 27 states acknowledge that the aging of the workforce is a threat to their organization because of “loss of institutional knowledge with Baby Boomer retirements” and the “brain drain that occurs when skilled folks retire,” according to the States as Employers-of-Choice survey by the Sloan Center on Aging & Work (Fall 2008).
Not surprisingly, in an effort to address the forthcoming evaporation of talent, the top current priority reported among state agencies, increasing productivity through increased efficiency, was nearly unanimously 100% (see Figure 1). Previous surveys by the Center have shown that private sector organizations share increasing productivity as a top priority, though to a slightly lesser degree (89.1%). Given the current economy, productivity will likely continue to be a major priority for state agencies as Baby Boomers exit the workforce over the coming years.
Both public and private sectors also agree that managing human resource talent is one of their greatest challenges to becoming successful (state agencies—95.3%, private sector—88.9%). Workforce management practices can have a significant impact on an organization’s ability to recruit, train, and retain the talent needed to meet organizational objectives. Both sets of respondents identified effective workforce management as critical to meeting agency objectives, whereas ineffective practices were deemed as threats.
Addressing Shortages by Being Flexible
With budget shortfalls projected to continue into 2010, attention to cost is essential to ensuring that state agencies can continue meeting objectives despite a decreased workforce and, for many, an increase in demand for services. When asked about the top threats that could make it difficult for the agency to fulfill its mission, decreases in funding(revenue) and an inability to recruit and retain the staff needed were common threats cited by state agencies.
In addition to cost leadership (reducing economic costs below those of competitors) and the unpopular choice of cutting the costs of personnel, state agencies reported undertaking measures to ensure they had the talented workforce needed to meet objectives. For example, agencies identified leadership training and knowledge transfer as opportunities to ensure that institutional knowledge was retained in light of the aging of the workforce.
One notable step has been to prioritize flexible staffing due to differences in workforce demographics, in contrast to the private sector. As nearly a quarter of the workforce in state governments is 55 years-of-age and older (compared to 16.7% in the private sector), offering flexible staffing is seen as a strategy to retain older workers and recruit workforce talent.
Offering flexible work options can be one strategy organizations utilize to encourage older workers to work past traditional retirement age, as most older workers who want to remain in the workforce state that the typical 8-hour-a-day, 5-day-a-week workweek is not the employment structure they desire. Providing employees access to flexible work options can be a cost-effective way to recruit skilled applicants and retain workforce talent.
The States as Employers-of-Choice project is a collaborative initiative being implemented by the Twiga Foundation, Inc. and the Sloan Center on Aging & Work at Boston College. This 2-year project, supported by the Alfred P. Sloan Foundation, provides resources to HR managers at state agencies so that they can respond to shifts in the age demographics of the workforce.
The analyses presented in Comparing the Priorities of State Agencies and the Private Sector is one component of the overall project. Data collection for the study began in spring 2008 and concluded in fall 2008. A total of 222 agencies from 27 states responded to the online survey used to gather information.
The survey results are compared in a number of areas with the 2006 National Study of Business Strategy and Workforce Development conducted at the Center. Although the economic and demographic situation has evolved over the 2-year time span, the two studies ask many of the same questions and provide a unique window into how thinking and practices in the private and public sector compare.